HOME GENTER MERGHANTI

Bill Fishman & Affiliates

11650 lberia Place San Diego, Ca.92128

I DON'T KNOW whether to title this I column "What's Convenience Worth?" or "There are some things you just don't talk about," or "Do it for Murray."

In the Store Wars today many retailers have take a position as "convenience stores." It is their answer to the warehouse outlet competition. I, too, believe that retailers in the lumber and building material industry can survive the onslaught of the warehouse chains with a market position as a convenient, local, service store. I also believe that a retailer has the right to be slightly higher than more distant competition because the store is more conveniently located, but please . Don't Tell That To Your Customers!

When you are challenged by a customer who quotes you the warehouse store price your best bet is to acknowledge the difference and meet the price. Or explain how some retailers can offer short term specials on a few items to attract customers, but that your store maintains a competitive position on the material list for the overall project, But never, never advise a customer he is paying more because you're moreconvenient. He may feel that he is . but he does not want you to confirm it.

When you tell a customer he's paying you more money than elsewhere, he feels you are branding him an easy mark every time he shops in your store . , so he won't.

Some of my basic training in human relations came during my upbringing in the New York City area. As a young new-home owner, I soon learned that a fast way to lose the esteem of friends and neighbors was to show an inability to "buy right." Shopping for price became a necessity, not because of the effect on the household budget, but rather because of the ridicule by Murray, the nextdoor neighbor. He was the guy who, when escorted to the newly-paneled family room, would ask, "What did you pay for the paneling?" and when you answered $11.99 a sheet, he'd respond, "Jerk, I could have gotten it for you for $9.99 at 2 Guys."

If you have to charge more for your merchandise you owe your customer some better explanation than"convenience." Give him something with which to face Murray.

Fremont specializes in a large inventory of high quality Douglas fir boards, dimension, long lengths and timbers shipped from select mills in British Columbia, Oregon and California. We are constantly adding to our selection of western red cedar, pine, hemlock and white fir. Other species and specialty items are inventoried and included in our weeklv flver sent to all Fremont customers.

In Memorium

A. D. Bell, Jr. 1909-1985

It is our sad duty to report the death of A.D. "Al" Bell, Jr., a longtime industry member, a former co-owner of The Merchant Magazine and, most important of all, a friend.

A formal obituary notice appears on page 82 of this issue. It recounts the details of his lifetime of achievements and contributions.

We would like here to reflect briefly on the remarkable man that was Al Bell. He spent freely of his time and energy in the true spirit of the volunteer. If something needed to be done, he did what he could to help. His modesty and lack of ego meant his contributions were sometimes unrecognized. But he didn't care, because he was that kind of man.

In business he was honest and equitable in his dealings. During the eleven years he and I were business partners he was unfailingly fair, generous and considerate. He couldn't have been kinder to me had I been his son.

Knowing Al was a joy. He was a lot of fun, a master storyteller, a connoisseur of congeniality and the kind of man other men are proud to call their friend. He always had a smile on his face and a good word, even during those times when I knew that the fates had been unkind to him. But then Al always seemed to be thinking of the other person. ((It doesn't cost any more to be nice," he would say. It was typical of Al Bell. We miss him already.

David Cutler Editor/Publisher

CCORDING to a recent report made public by the National Association of Home Builders (NAHB), greater emphasis will continue to be placed on the remodeling market as compared to new home construction. The reason is simply the builder's desire for more protection from the ravages of the business cycle.

In the 1990s, as demand for new homes falls, it is possible that remodeling will parallel home building as the most important operation among builders. The changing compledty of the housing industry is well documented. Between 1976 and 1983, the percentage of NAHB builders listing the building of houses for sale to the general public as their principal operation declined from 5990 to 410/0. During the same period, builders mainly involved in remodeling experienced a fourfold increase.

The IRS mileage deduction for business use of cars has been raised to 210 per mile, retroactive to January I, 1985. It applies to the hrst 15,000 miles each year. Thereafter it is lla. Deduction for charity is l2a, for medical or moving, 90.

Do you have a formal check cashing policy for your retail establishment? The passing of fraudulent checks has reached epidemic proportions and small retail businesses incur losses that are 35 times greater than large retailers because there is often no formal policy about accepting checks, or employees have not been properly trained to spot checks that may be phony. Con artists know this and flood small retailers with bad checks. Here are some suggestions:

(1) Require that all checks be examined for possible alteration. Erasures, blots, changes in ink color, changes in the thickness of the writing and poor spacing of words or numbers suggest that the check has been altered.

(2) Examine the date. Post-dated checks could mean the issuer either has no funds in the account or is attempting to pass a bad check.

(3) Check the magnetic ink Character Recognition Code on the check with the customer's bank account number. A code that does not agree means that the check is forged and the forger failed to realize that the two must agree.

(4) Watch for double endorsements that don't agree with the name shown on the check. Either one could indicate a forgery or a stolen check.

(5) Identify the customer either by sight or byasking for double identification. Both identifications should bear the signature of the individual tendering the check and at least one should have a picture as well, Driver's licenses, national credit cards, and govemment or military I.D, cards are considered reliable identification. Social Security cards, temporary driving permits, voter registration stubs and club membership cards are unacceptable.

Your newspaper may be a member of the Newspaper Advertising Co-op Network. If so, there is a co-op specialist at the paper to help you get co-op dollars available to you. In "Newspapers Make Co-op Easy to Use," the Newspaper Advertising Bureau makes the following suggestions:

(1) Assume that co-op ad dollars edst on every product you buy.

(2) Do not buy merchandise without making a deal sheet out for every vendor and keep a simple running total of your accruals.

(3) Question every sales rep on how much co-op has accrued as a result ofthat particular purchase, whether it be on the phone or in person.

(4) Keep an alphabetical file of all coop programs available to your store.

(5) Post a calendar showing co-op purchase periods with expiration dates marked on that calendar, so no co-op dollars go uninvested,

(6) Set a system to use co-op dollars in tandem with price point reduction.

(7) Don't be fooled into thinking that because you've only made small purchases, not much co-op will accumulate.

(8) Ask for co-op funds at seasonal markets, trade shows and regional buying shows,

Ihowing the amount of cash that is provided from operations is extremely important for a small business since it gives an insight into the financing requirements that may have to be met through additional investments by the owners or borrowing. Unfortunately cash flow from operations is an elusive figure because income statements are traditionally prepared on an accrual basis. However, there is a relatively simple approach for converting them to a cash basis in order to reveal the cash flow from operations. Here are the steps in the process:

(1) Start with net income.

(2) Add: depreciation and amortization expenses; deferred tax charges; losses on sales of property, plant and equipment.

(3) Deduct: gains on sales of property, plant and equipmenq amortization of bond premiums; equity in the earnings of subsidiary companies, deferred tax credits.

(Please turn to page 27)